News | Nov. 20, 2015

Fuel Rebalance

By Christopher Goulait DLA Energy

After years of planning, Defense Logistics Agency Energy’s efforts to rebalance fuel and its infrastructure in the Pacific theater are gaining momentum. Since 2009, the field activity has been working to enhance its fuel support and storage capabilities throughout the Asia-Pacific region.

“The rebalance has been happening for a while now, and it’s been happening in a couple of different ways,” said DLA Energy Commander Air Force Brig. Gen. Mark McLeod. “From a logistics standpoint, we’ve been working for several years to rebalance assets in the Pacific.”

In 2009, U.S. Pacific Command, DLA Energy, U.S. Transportation Command, military service components and the Air Force’s Space Applications Program offices took part in a study assessing PACOM’s operations. Results of the study led to a business case analysis to optimize PACOM bulk petroleum support and recommended DLA Energy turn to commercial alternatives to rebalance war-reserve petroleum stocks in the region.

“Rebalancing assets in the Pacific means positioning supplies of fuel in the correct locations in the area of responsibility to support warfighter requirements, and also having a plan to move assets from other locations as necessary to meet those requirements as conditions change,” said DLA Energy Pacific Commander Navy Capt. Christopher Bower.

That could mean physically relocating fuel, as in the case of a contractor-owned, contractor-operated facility in the Philippines, he added, or an exchange of fuel stocks on the open market to meet emerging requirements.

In late 2014, a DLA-PACOM wargame revisited the study’s concerns. Questions such as, “Does PACOM have the capacity to do the job? Is there enough fuel? Is the fuel in the right locations? Are DLA’s strategic reserves and infrastructure enough to support the Pacific rebalance?” were central to the wargame, McLeod said.

“We found some interesting things through that process, but to answer those questions in a nutshell: Yes, but we can definitely do better,” he said. “Going through these wargame scenarios and taking a look at other locations or capabilities can help us make the warfighter more resilient.”

The wargame revealed that DLA has plenty of fuel all around the world and can quickly take advantage of commercial contracts if necessary, he continued. And while much of that fuel is in the right places, DLA Energy personnel are determining whether existing capabilities can be moved even closer to customers, McLeod said.

To achieve this, DLA Energy personnel are focusing on five defense fuel-support points – in Alaska, Guam, Philippines, Singapore and Japan – that can serve as commercial bulk fuel storage facilities under contract in support of PACOM. Each can store and distribute fuel by pier and/or pipeline, with a collective total of 4.6 million barrels of commercial bulk fuel.

“What’s good about this economically is that we can create contracts where we need them and not have government infrastructure,” McLeod explained. “They tend to be very flexible and very affordable. If we need it, we can use it.”

The Philippines’ Subic Bay facility is new and a good example of improved support to PACOM, Bower said. The Navy’s Task Force 73 and Military Sealift Command have already refueled multiple combat logistics force ships there instead of Japan or Singapore.

“If we can refuel them at sea, then they don’t have to pull into port themselves and can stay on station doing the mission they are assigned for a much longer period. It becomes a force multiplier, as we need fewer warships to perform a specific mission,” Bower added.

Well-placed locations are important, but adapting for resiliency and redundancy is also a priority for the rebalance, McLeod said.

“DLA Energy uses a combination of setting up major nodes and making sure they’re strong but redundant in case the situation calls for it,” he said.

Storage in the Pacific, including commercial storage, is made up of 850 million gallons of prepositioned war-reserve stock in 66 DFSPs and facilities with a storage capacity of 1.2 billion gallons of fuel. Fuel is split between 713 storage tanks located in Hawaii, Alaska, Korea, Japan, Guam, Singapore, Diego Garcia, the Philippines and several other locations.

The use of commercial fuel in the region also boosts resiliency, McLeod said.

“DLA Energy can rely on the commercial supply chain since so much of our business revolves around having great relationships with our suppliers around the world,” he said. “A solid relationship is important as a foundation for working to expand the availability of military and commercial-specification fuels to new locations in the region. We are diversifying our requirements and growing our capabilities in the Pacific.”

Good supplier relationships support the organization’s ultimate customer, the warfighter, Bower said, adding that DLA Energy works with the military services to ensure fuel support meets their needs.

“Working with our customers to determine what their requirements are will allow us to develop multiple support options,” he said. “While our customers would like us to store all their requirements in the AOR, we don’t currently have enough storage to do so. That means we will need to look at other strategies, such as swing stocks and pulling product forward from other locations, to meet customer demand.”

In addition to working with U.S. forces, DLA Energy Pacific works with a number of nations in the region since the PACOM AOR contains 36 nations, 51 percent of the earth’s surface and 50 percent of world’s population.

“DLA Energy is talking with our counterparts in other nations in the Pacific to see how we can address factors that are important to all of us, like lowering costs, increasing cooperation with the commercial supply chain, efficiently sharing fuel and fixing aging infrastructure,” McLeod said. “For example, we’re discussing a fuel exchange agreement and increasing storage with Australia. Working with our partner nations not only has military benefits for the U.S., but also builds the nation’s homeland defense and provides economic benefits to the areas supported by contracts we put in place.”

Cooperation with partner nations will continue as the agency repositions fuel and takes advantage of everything the commercial supply chain has to offer, he added.

“Rebalancing the Pacific this way can build confidence and collective security to ensure that the nations in the region and the commerce between them can be protected,” he said.

 Terry Shawn contributed to this article.